Ajcon Global is bullish on Sangam India has recommended buy rating on the stock with a target price of Rs 424 in its research report dated November 30, 2016.
Ajcon Global's research report on Sangam India
Sangam being probably the only Company which has all the segments of textiles industry including seamless women which has value addition. With due consideration to factors like a) Company managed by very well qualified, experienced and dedicated professional management, b) a fully corporate governance compliant Company with full transparency, c) diversified product mix with market leadership in most of its products, d) foray into seamless female garments segment with its own brand of “Channel Nine” which will add tremendous value to the Company, e) impressive financial performance with strong cash flows, f) prudent debt management – debt/equity to improve to 0.99x by FY18E from current 1.33x in FY16 inspite of expansions for capacity additions, g) ROE set to improve, h) stock attractively trading at cheap valuations of 7x at estimated FY18 EPS, hence we recommend a “BUY”. We value the stock at Rs. 424 (by assigning a multiple of 12x (which is appropriate considering the strengths of the Company and its market leadership) at revised FY18E EPS of Rs. 35.4.
For all recommendations, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.